May 3, 2014

February 1, 2014

May 4, 2013

Assets

Current assets:

Cash and cash equivalents

$

37,817

$

33,431

$

56,116

Accounts receivable, less allowance for uncollectible accounts of $1,486, $1,320 and $1,230

27,385

25,152

25,215

Merchandise inventories

663,554

672,354

648,148

Prepaid expenses

26,430

29,282

29,135

Other current assets

60,047

63,405

59,048

Assets held for disposal

2,013

2,013

—

Total current assets

817,246

825,637

817,662

Property and equipment, net of accumulated depreciation of $1,245,488, $1,227,121 and $1,182,713

622,866

625,525

647,636

Goodwill

56,794

56,794

46,917

Deferred income taxes

57,068

57,686

46,303

Other long-term assets

38,977

39,839

37,410

Total assets

$

1,592,951

$

1,605,481

$

1,595,928

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable

$

247,756

$

256,031

$

245,193

Trade payable program liability

134,121

129,801

149,387

Accrued expenses

226,667

237,403

229,452

Deferred income taxes

69,498

69,373

53,481

Current maturities of long-term debt

2,000

2,000

2,000

Total current liabilities

680,042

694,608

679,513

Long-term debt less current maturities

202,500

199,500

197,500

Other long-term liabilities

48,186

48,485

52,202

Deferred gain from asset sales

111,672

114,823

124,276

Commitments and contingencies

Stockholders’ equity:

Common stock, par value $1 per share:

Authorized 500,000,000 shares; issued 68,557,041 shares

68,557

68,557

68,557

Additional paid-in capital

297,002

297,009

295,059

Retained earnings

433,673

432,332

433,734

Accumulated other comprehensive income (loss)

341

379

(867

)

Treasury stock, at cost - 15,314,768 shares; 15,358,872 shares and 15,365,117 shares

(249,022

)

(250,212

)

(254,046

)

Total stockholders’ equity

550,551

548,065

542,437

Total liabilities and stockholders’ equity

$

1,592,951

$

1,605,481

$

1,595,928

Supplemental balance sheet information:

Working capital

$

137,204

$

131,029

$

138,149

Current ratio

1.20

1.19

1.20

Accounts payable to inventory ratio

57.6

%

57.4

%

60.9

%

Total debt as a percent of total capitalization

27.1

%

26.9

%

26.9

%

Debt as a percent of total capitalization, net

23.2

%

23.5

%

20.9

%

Thirteen weeks ended

May 3, 2014

May 4, 2013

%

%

Amount

Sales

Amount

Sales

Merchandise sales

$

411,906

76.4

$

417,150

77.8

Service revenue

126,915

23.6

119,023

22.2

Total revenues

538,821

100.0

536,173

100.0

Costs of merchandise sales

285,047

69.2

296,857

71.2

Costs of service revenue

120,648

95.1

117,476

98.7

Total costs of revenues

405,695

75.3

414,333

77.3

Gross profit from merchandise sales

126,859

30.8

120,293

28.8

Gross profit from service revenue

6,267

4.9

1,547

1.3

Total gross profit

133,126

24.7

121,840

22.7

Selling, general and administrative expenses

127,071

23.6

118,203

22.0

Net loss from dispositions of assets

(10

)

—

(116

)

—

Operating profit

6,045

1.1

3,521

0.7

Other income

441

0.1

378

0.1

Interest expense

3,782

0.7

3,679

0.7

Earnings from continuing operations before income taxes and discontinued operations

2,704

0.5

220

—

Income tax expense (benefit)

1,067

39.5

(1)

(3,708

)

N/M

(1)

Earnings from continuing operations before discontinued operations

1,637

0.3

3,928

0.7

Loss from discontinued operations, net of tax

(29

)

—

(65

)

—

Net earnings

1,608

0.3

3,863

0.7

Basic earnings per share:

Earnings from continuing operations before discontinued operations

$

0.03

$

0.07

Discontinued operations, net of tax

—

—

Basic earnings per share

$

0.03

$

0.07

Diluted earnings per share:

Earnings from continuing operations before discontinued operations

$

0.03

$

0.07

Discontinued operations, net of tax

—

—

Diluted earnings per share

$

0.03

$

0.07

Other comprehensive (loss) income:

Derivative financial instruments adjustment, net of tax

(38

)

113

Other comprehensive (loss) income

(38

)

113

Comprehensive income

$

1,570

$

3,976

Thirteen weeks ended

May 3, 2014

May 4, 2013

Cash flows from operating activities:

Net earnings

$

1,608

$

3,863

Adjustments to reconcile net earnings to net cash provided by continuing operations:

Net loss from discontinued operations

29

65

Depreciation

18,320

20,852

Amortization of deferred gain from asset sales

(3,151

)

(3,151

)

Amortization of deferred financing costs

664

650

Stock compensation expense

826

869

Deferred income taxes

743

(3,872

)

Net loss from dispositions of assets

10

116

Loss from asset impairment

1,172

1,183

Other

(111

)

(126

)

Changes in assets and liabilities, net of the effects of acquisitions:

Decrease (increase) in accounts receivable, prepaid expenses and other

4,174

(699

)

Decrease (increase) in merchandise inventories

8,800

(6,940

)

(Decrease) increase in accounts payable

(8,903

)

262

Decrease in accrued expenses

(12,467

)

(2,211

)

Decrease in other long-term liabilities

(231

)

(1,338

)

Net cash provided by continuing operations

11,483

9,523

Net cash used in discontinued operations

(29

)

(88

)

Net cash provided by operating activities

11,454

9,435

Cash flows from investing activities:

Capital expenditures

(14,565

)

(12,840

)

Proceeds from dispositions of assets

—

2

Release of collateral investment

—

1,000

Net cash used in investing activities

(14,565

)

(11,838

)

Cash flows from financing activities:

Borrowings under line of credit agreements

164,206

590

Payments under line of credit agreements

(160,706

)

(590

)

Borrowings on trade payable program liability

49,708

46,181

Payments on trade payable program liability

(45,388

)

(46,512

)

Debt payments

(500

)

(500

)

Proceeds from stock issuance

177

164

Net cash provided by (used in) financing activities

7,497

(667

)

Net increase (decrease) in cash and cash equivalents

4,386

(3,070

)

Cash and cash equivalents at beginning of period

33,431

59,186

Cash and cash equivalents at end of period

$

37,817

$

56,116

Supplemental cash flow information:

Cash paid for income taxes

$

—

$

1,430

Cash received from income tax refunds

$

174

$

51

Cash paid for interest

$

2,659

$

2,987

Accrued purchases of property and equipment

$

5,748

$

1,055

COMPUTATION OF BASIC AND DILUTED EARNINGS PER SHARE

(in thousands, except per share data)

Thirteen weeks ended

May 3, 2014

May 4, 2013

(a)         Earnings from continuing operations before discontinued operations

$

1,637

$

3,928

Loss from discontinued operations, net of tax

(29

)

(65

)

Net earnings

$

1,608

$

3,863

(b)         Basic average number of common shares outstanding during period

53,470

53,388

Common shares assumed issued upon exercise of dilutive stock options, net of assumed repurchase, at the average market price

539

603

(c)          Diluted average number of common shares assumed outstanding during period

54,009

53,991

Basic earnings per share:

Earnings from continuing operations before discontinued operations

(a) / (b)

$

0.03

$

0.07

Discontinued operations, net of tax

—

—

Basic earnings per share

$

0.03

$

0.07

Diluted earnings per share:

Earnings from continuing operations before discontinued operations

(a) / (c)

$

0.03

$

0.07

Discontinued operations, net of tax

—

—

Diluted earnings per share

$

0.03

$

0.07

ADDITIONAL INFORMATION

(dollar amounts in thousands)

Thirteen weeks ended

May 3, 2014

May 4, 2013

Capital expenditures

$

14,565

$

12,840

Depreciation

$

18,320

$

20,852

Non-operating income:

Net rental revenue

$

399

$

250

Investment income

47

49

Other income

(5

)

79

Total

$

441

$

378

Comparable sales percentages:

Service

3.2

%

4.2

%

Merchandise

-2.8

%

0.1

%

Total

-1.4

%

1.0

%

Total square feet of retail space (including service centers)

12,845,000

12,815,000

Store count

Supercenter

567

569

Service & Tire Center

225

188

Retail Only

6

6

Total

798

763

Sales and gross profit by line of business (A):

Service center revenue

$

293,913

286,978

Retail sales

244,908

249,195

Total revenues

$

538,821

$

536,173

Gross profit from service center revenue, prior to impairment charge

$

64,735

53,012

Service center revenue impairment charge

(956

)

(1,017

)

Gross profit from service center revenue

$

63,779

$

51,995

Gross profit from retail sales, prior to impairment charge

$

69,562

70,011

Retail sales impairment charge

(215

)

(166

)

Gross profit from retail sales

$

69,347

$

69,845

Total gross profit

$

133,126

$

121,840

Comparable sales percentages by line of business (A):

Service center revenue

-1.0

%

3.9

%

Retail sales

-1.9

%

-2.1

%

Total revenues

-1.4

%

1.0

%

Gross profit percentage by line of business (A):

Gross profit percentage from service center revenue, prior to impairment charge

22.0

%

18.5

%

Impairment charge

(0.3

)

(0.4

)

Gross profit percentage from service center revenue

21.7

%

18.1

%

Gross profit percentage from retail sales, prior to impairment charge

28.4

%

28.1

%

Impairment charge

(0.1

)

(0.1

)

Gross profit percentage from retail sales

28.3

%

28.0

%

Total gross profit percentage

24.7

%

22.7

%